Individual Case Study
Values & Ethical Issues for Tourism,
Hospitality and Events: Small Business
Management
Situation
The Australian based operation, Travel Masters Elite, was founded in 2013 by two MTHEM
graduates from UQ (Mike and Ruyi) who wanted to provide adventure-based trips to Fiji. At the heart of their enterprise was a desire to do something they genuinely loved doing themselves and to build a successful business that they could perhaps sell in 10 or 15 years’ time as their lifestyle and commitments changed.
Once they began operations and had a degree of financial success (beyond initially taking their friends and relatives away on get-away holidays), they realised there was a viable market gap they could fill, especially since they founded their organisation on three basic principles:
1. delivery of excellent quality at affordable prices;
2. offering travel experiences that respected clients’ needs but which also valued the
destinations’ people, culture, economies and environments; and
3. providing extraordinary travel experiences off the beaten track.
Now coming to the end of their first 7 years of business, Mike and Ruyi wanted to expand their product offerings to include travel to parts of Southern and Central Africa. They reasoned this would not only diversify the destinations they could provide access to, but also (they thought) potentially support emerging African nations and their local economies. Based on the past holiday experiences of Mike, they decided they would expand their product to initially include an African safari experience. This would not only be a unique opportunity in an area renowned for its diversity of plants and wildlife; but also a sound business decision with clients seeking out new and novel experiences in emerging, and exotic travel locations. While the politics of the area selected was unstable, they knew there were promising mid to long term business opportunities and felt the time was right to enter the market.
The meetings the two company owners initially had with key stakeholders in the selected
African nation were sufficiently positive for them to continue to progress their plans for an
expansion of their product offerings. While some government agents were, at best, noncommittal in their responses to the Travel Masters Elite requests for support of their business plans, they noted their proposal was not rejected outright by the powers-that-be. Moreover, they were grateful for the strong support they found from local business owners who could be their new in-country suppliers. This included a local garage and associated mechanical workshop, a newly emerging guide company who were keen to tender to be the ‘on the 2 | P a g e ground’ support staff for the safaris, and a local hotel chain. The latter being particularly important as it was felt they could provide the necessary arrival and departure accommodations to the tour company, as well as provision of the ‘in-country’ catering services for the planned safaris themselves.
Their situation became increasingly problematic however as Mike and Ruyi sought the
official licenses and permissions they needed to legally operate their business in this small
African nation. While they readily accessed initial information, they found that at every
step of the negotiation processes there was an unwritten expectation they would pay for
additional information, advice, direction or service. This they found to be a feature of their
interactions at all levels, from political and government agents through to small business
operators. Indeed, this occurred to such an extent they realised the “required payments”
(what Mike and Ruyi personally considered to be a most distasteful form of bribery) was
not just part of the culture, it was considered a normal part of completing negotiations and
facilitating daily business in that region.
Their troubles however did not stop there. On further investigation they found it was going to
prove difficult to find suppliers they believed were ethical in conduct and which used ethical
practices. For example, the workers in the factory that would supply the safari tents and
bedding were required to regularly work more than 10 hours a day without any form of
compensation for the extra effort evident. They also found the main food suppliers were
suspiciously aligned with individuals who could be best described (in a western setting at
least) as black marketers. Worse, there seemed to be a monopoly on vehicle sales by relatives
of high-level government ministers, leaving them with few choices if they were to continue
to push ahead with their company’s expansion plans.
Mike and Ruyi were in a quandary. They believed they had strong ethical intentions and
practices and this had been the cornerstone of their business from day 1. Yet, it could be
argued their principle to respect local culture and economies meant they should follow local
business practices and succumb to the call for the “required payments”. What challenged
them even further was the knowledge that other international organisations now moving into
the country to set up services were sidestepping their own ethical concerns by hiring a local
mediator to secure the requisite licenses and permits, thus removing the original company
from direct involvement in any of the negotiations. What were Mike and Ruyi to do?
Questions to Ponder
1. What are the potential implications to Mike and Ruyi, the Travel Masters Elite
Company, and their relationships with key stakeholders if they succumb to the
request for “required payments”?
2. Where these required payments are considered ‘standard practice’, how can the
ethical business manager respond?
3. Why might bribes and unethical business practices, be considered the ‘norm’
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in some countries and cultures?
4. If Mike and Ruyi paid bribes and used unethical suppliers in Australia, what
type of consequences might they, and their business operations, face?
5. In what ways are ethics and morals evolving as the world becomes more
connected, and business more global in nature?
6. How can the Travel Masters Elite Mission Statement, Principles and Values be used
to help Mike and Ruyi make a decision on the ethical challenges they are facing
